Five populations with varying percentages of animals in full-sib families were simulated. For each population, three combinations of additive and dominance genetic variances of different relative magnitudes were considered, thereby creating fifteen sub-populations. Constant residual variance was used in all populations. Variance components were estimated using the tilde-hat approximation to REML based on sire-dam model. Populations with few full-sibs (2% and 10%) and small magnitude of dominance variance (50), resulted in inaccurate estimation of dominance genetic variance. In populations with a large number of animals having dominance genetic relationships (20% or greater), estimates of dominance genetic variances can be obtained with improved accuracy even when the dominance genetic effect in the population is of small magnitude. Overestimation of additive genetic variance increased as both the number of full-sibs and the magnitude of dominance effects increased.